Bebo may have sold to AOL (NYSE: AOL) for $859.8 million in May 2008 – but the social network’s UK office then crashed from a £2.6 million annual profit to a £1.1 million loss (now $1.7 million).
The 143 percent fall happened because Bebo UK incurred a £1.6 million tax loss after the acquisition, and is recorded in accounts for the year to May 31, 2009.
Before accounting for tax, Bebo’s ordinary operating profit fell by 32 percent, from £798,560 to £541,268, after sales fell 29 percent to £6.2 million (now $9.6 million).
The company incurred much of the tax loss to use as an asset to offset future taxable profits, according to accounts, which say the company had “anticipated that the losses would be utilised over many years”.
More recent figures, which have informed AOL’s decision to sell or shut the company, are not yet available. The accounts state:
Also from the accounts:-
— Bebo staff took £3.8 million for their stock options in 2007/08 and 2008/09.
— The wage bill grew from £1.9 million to £2.6 million over the year.
— Bebo UK received £5.5 million from its U.S. parent Bebo Inc in 2008/09, and earned £6.2 million from it in revenue.
The company had split around 100 staff between London and San Francisco, though now has far fewer employees after AOL restructuring. AOL has never broken out Bebo’s total U.S. earnings.